BRAC, the world’s largest development NGO, examines the limitations of Cost Benefit Analyses and how to improve research methodologies for more informed policy and investment decisions.

In the last ten years, we have seen a push from investors, foundations, governments and concerned citizens for better impact evaluations to prove which development programs work consistently across contexts, with sustained outcomes over time.

Thanks to the generosity of the Citi Foundation, the US Financial Diaries launched a blog and webinar series in partnership with Stanford Social Innovation Review. The series looks at the financial lives of working Americans and offer new insights for designing policies, programs, and products that can better meet their needs. Over the past month, there have been a number of exciting updates in the series...

Ellen Seidman, senior fellow at the Urban Institute, discusses the role of housing instability for the latest post in the The Hidden Financial Lives of America's Poor and Middle Class blog and webinar series. Seidman points out that even if regulation helps to preserve America's limited stock of affordable housing, household income fluctuations still present barriers to home ownership:

Income volatility can also impact the process of getting a mortgage. In addition to savings, lenders make mortgages based on a potential buyer’s income. Traditionally, borrowers must have two years of stable earnings, and the only income lenders take into account for underwriting is that of the borrower and co-borrower. When families have multiple earners (who may change over the course of a year—let alone the much longer term of a mortgage) whose income is variable, this can present serious difficulties.

Research from the US Financial Diariesprovides evidence that income and expense volatility makes it difficult for households to build assets, including housing.

For the latest post in the new SSIR blog and webinar series, The Hidden Financial Lives of America's Poor and Middle Class, assistant professor and author H. Luke Shaefer discusses the relationship between changing labor markets and income volatility. Shaefer points out that "the interaction between precarious work and an employment-based safety net is a big part of why we’ve seen a sharp uptick in the number of families" struggling to get by. Even when households do find work, it is often unpredictable or piecemeal. Research from the US Financial Diariesprovides evidence that this growing income and expense volatility makes it difficult for households to build assets.

Mobile money’s early adopters in Bangladesh are much like those who first take up many emerging technologies worldwide - literate urban males who are above the poverty line. Mobile money’s promise, however, lies in its potential to deliver financial services cheaply and easily to groups who traditionally have less access to formal financial tools including women and the poor.

The first blog post focuses on how the financial lives of Americans have changed in the past 30 years and why the programs, policies, and products designed to help them need to change too. The second post discusses why growing income and expense volatility make it difficult for households to build assets, even with relatively high savings rates.

Although micro-credit has been perceived as effective in reducing poverty, in reality, its impact has been modest. One reason could be that most microloans extended to the poor are term loans, which are not well-suited for borrowers with variable or risky income streams, for example, traders needing working capital for purchasing inventory, or farmers who earn lump-sum income after harvest. While the Indian government has been encouraging banks to provide credit in the form of over-draft, term loans continue to remain the predominant credit product.

In 2013, the Rural Financial Institutions Programme represented by GIZ and the National Bank for Agriculture and Rural Development (NABARD), partnered with Mann Deshi Mahila Bank to launch a new overdraft facility serviced through banking agents to traders and farmers selling groceries in rural markets in Maharashtra, India.

The irresistible force of commitment savings met its immovable object. In every pilot, the products rarely moved off the shelf, and when they did, it was for reasons other than the value of the product itself.

Few objects signal middle class like housing. More than a car, more than clothing or other life accoutrements, there’s nothing like owning a modest home to send the message that the family has achieved this near-universal dream.

In wealthier countries, the issue of housing is largely seen through the lens of ownership – families who own their homes are likely to see their assets grow far more than families who rent, even if their incomes are identical. Home ownership (or lack thereof) is the reason why the wealth gap is so much greater than the income gap.

A key concept in economics is fungibility – that a “dollar is a dollar is a dollar.” However, money also carries cultural and social significance. In The Social Meaning of Money, Viviana Zelizer argues that people attach different meanings to different income sources. A new publication from FAI Executive Director Jonathan Morduch reviews Zelizer’s book and applies key lessons to the economic study of poor households

In honor of Angus Deaton's Nobel prize announcement, below is an excerpt from the forthcoming book Experimental Conversations, to be published by MIT Press in 2016. The book collects interviews with academic and policy leaders on the use of randomized evaluations and field experiments in development economics. To be notified when the book is released, please sign up here.

Recently, The New York Times Magazine ran a feature on the bail process for petty crimes, with a focus on the Brooklyn, NY court system. Although bail was historically set as a bond to ensure a defendant will return to court for trial, it is increasingly used as a tool for incarceration. According to the article, at any given time, 450,000 individuals in the U.S. are held in detention awaiting trial because they were unable to pay their court-assigned bail. A disproportionate number of these are poor.

In the past, we've talked about peer effects and low adoption rates of mobile money banking accounts in Bangladesh. Our research exploring these issues (as well benefits for migrant workers) is in full swing! It is a randomized evaluation, which means that half of the sample is randomly assigned to a control group, while half of the sample is randomly assigned to the treatment group, which receives training and assistance with signing up for mobile money accounts.

In this video, co-investigator Dr. Abu Shonchoy audits the training by re-interviewing a woman who was part of the treatment group to make sure that the training was thorough and made the service understandable to the participant . . .

The 2014 Global Findex data has been a hot topic of conversation around the FAI offices since its release last month. While there is a lot to dissect in the 97-page report, the biggest headline is the 20% decrease in the number of unbanked worldwide - approximately 700 million people worldwide.

However, there are concerns that this number is overstated and the data leave us with outstanding questions as to why certain trends occur over the last 4 years. One reason is we do not yet have access to the microdata. When we can only use broad strokes to tell a nuanced story, many of the finer points are lost, like regional differences in financial inclusion changes.

We know that the path out of poverty is rarely a smooth one. The poor are buffeted by a wide range of shocks, pushing them backwards along the way. Exploring the world of risk in the Kenya Financial Diaries, we learned that for many of the poor, navigating a world of risk is actually not only about how you manage your money. It’s also about how you manage relationships with friends and family who can come to your aid when things go wrong. Consider Greta’s story:

Greta and her husband had saved money for a caesarian section she would need to deliver her baby. But public health facility workers went on strike just she was due, and the cost of care at a private facility was five times higher, much more than Greta could finance without hard and dangerous sacrifices. Through friends and family Greta was able to raise roughly 75% of the additional funds needed.

If asked to picture a savings group, the images, like the one below, that most likely would come to mind are ones of circles of women sitting on the ground, maybe under a tree. That’s how we typically conceptualize savings groups (and microfinance clients) - as a single, essentially independent, unit . . .